Penalty Abatements

The difficulties of life can make it impossible to deal with income tax problems. A sick spouse, a dying parent, a hurricane. When things calm down it’s time to deal with the tax problems. Penalty abatement requests are good options to try to reduce the tax bill. We can help!

Have you ever been assessed “tax penalties” by the IRS because you failed to pay your taxes or because you filed late?

Did you know you may not have to pay all of them to the IRS if you had a good reason for not filing or paying the tax? In fact, you may not even owe any tax penalties at all if they were assessed to you unfairly by the IRS.

Unfortunately, when it comes to tax penalties, you are assumed guilty until you can show that you do not deserve to be charged these excessive penalties. A “Penalty Abatement Request” is the best way to remove tax penalties from your debt. Our income tax attorneys can help!

The IRS has the authority to assess over 140 different types of penalties. The most common are the “failure to pay” and “failure to file”. Each of those penalties alone can bring up to 25% more in tax liabilities.

When the IRS assesses penalties to taxpayers they are added automatically to the taxpayer’s account by the IRS computer systems without taking into account the taxpayer’s circumstances — that is, “Why” the tax was not paid or “Why” the IRS tax forms were filed late.

Taxpayers can seek relief from penalties by filing a “penalty abatement request”.

The most common method of abatement is “reasonable cause”. Here, the IRS looks at all of the facts and circumstances surrounding the situation leading to the assessment of the penalties. Relief is granted if the taxpayer exercised ordinary business care and prudence in determining their tax obligations but was unable to comply with those obligations. The existence of any of the following factors may establish reasonable cause:

• Death, serious illness, or unavoidable absence;
• Unable to obtain records;
• Incorrect advice from the service;
• Incorrect advice from a tax advisor;
• Fire, casualty, natural disaster, or other disturbance;
• Official disaster area; and
• Service error

In addition to “reasonable cause,” the IRS has a little known program to eliminate penalties for individuals with good tax compliance history. This program is known as the “First-time penalty” abatement. In order to receive this type of penalty abatement, you’ll have to have had no tax-related penalties and have filed and paid all taxes properly over the prior three years, plus be taking steps to pay off the taxes you owe.

We can help you determine whether you qualify for penalty abatement. Call us confidentially or fill out our confidential contact form to schedule your FREE initial consultation.